Thursday, June 19, 2014

Free Parking: A Gift to Whom?

A number of US cities at various times have had the same brainstorm: Why not offer free parking for a few days during the holiday shopping season? After all, it will presumably encourage holiday shoppers, and thus please retailers, and even provide some flexibility for city employees at a time when more people would prefer to be off work. Sure, it costs the city some money, but in the holiday season, why not give it a try? Donald Shoup, the guru of the economics of parking, unpacks the issues in "Parking  Charity," a short essay in the Spring 2014 issue of Access magazine.

Free parking during the holiday season has been tried in recent years in Berkeley, CA, Bellingham, WA, and Durango, CO. For me, as for many economists, my instant reaction when hearing about "free parking" is along the lines: "If I'm not there first thing in the morning, then I'm not going, because no parking spaces are going to be available later in the day." Shoup points to an article in the Durango Herald on December 23, 2013, pointing out the problems:

As sleigh bells ring and the countdown to Christmas comes to a close, the city has been promoting free downtown parking for holiday shoppers as it replaces 1,200 parking meters. But there is just one small problem: There’s nowhere left to park. ...  
“I get it,” said Alan Cuenca, owner of Put-a-Cork-in-It, 121 E. 10th St. “Idealistically, it was a good idea, but ultimately what has happened is all the employees that work downtown are taking full advantage of the free parking, and not leaving any for people who come downtown to shop.” Cuenca said he has noticed some motorists driving dangerously, pulling aggressive maneuvers to secure their spot before spreading commerce and holiday cheer. “It’s created a frantic frenzy just to find a spot,” he said. . . .
[Durango Business Development Manager Bob] Kunkel said some congestion had been anticipated . . . “We talked about (congestion) as a possible outcome, and I’ve noticed that every space in town is taken, but this enforces the job that parking meters do, and that’s to create turnover,” he said. Turnover, he added, equals one thing: more shoppers for businesses. “That’s why a parking spot is valuable to a merchant,” he said. “It’s turnover, and the more turnover the better.”

Shoup suggests that if cities are feeling charitable during the holiday season, they might just keep the parking meters in place, but announce that any funds or fines collected during the holiday season will go to charity. In Berkeley, this could have meant as much as $50,000 per day for charity. Or to push the point even further, shopping malls and other places that usually offer free parking could insert some temporary parking meters near the door of the mall, with the proceeds to go to charity. He writes:
"If cities donate their meter money to charity during the Christmas season, and if
stores place a few charity meters in their most convenient spots, drivers will begin to see that charging for parking can do some good for the world. Only a Grinch would demand free parking for Christmas."